A "full-scale property boom will begin in 2014"

Sibley

Bring it on.
Let's have house price inflation up up up.

Best news possible.

Perelandra

Graham_Devon wrote: »

That isn't what we have at the moment, again, IMO removing stimulus would be more akin to playing Jenga with the economy.

I love this image.

Conrad

chucknorris wrote: »

I have always thought that the last peak was quite high and I can't really see prices going much past that (in real terms).

Hamish is correct, prices will double in real terms in this cycle.

Booming ebullient economy is taking shape, confidence is building, the uk is becoming very enterprise friendly, there is a mood of self reliance rather than state hand-outs.

A reforming radical Government that will lead to a tory win in 2015. Miliband is on borrowed time.

HAMISH_MCTAVISH

Conrad wrote: »

Hamish is correct, prices will double in real terms in this cycle.

That does seem the likeliest outcome.

A reforming radical Government that will lead to a tory win in 2015. Miliband is on borrowed time.

I hope you're right, as the thought of Labour riding the next upswing through several terms of government is appalling.

However this has been a truly dreadful government, just staggeringly incompetent, and the economic recovery is despite their actions not because of them.

So while they may get lucky, and I hope they do, I also hope they learn from the mistakes of the last few years.

grizzly1911

HAMISH_MCTAVISH wrote: »

So to answer your question:

How high will they go?

I think we'll see prices nearly double in real terms over the next cycle, driven by worsening shortages and markedly lower average interest rates than the last cycle saw.

Isn't there an element in your equation that is missing - vastly rising incomes to match?

grizzly1911

HAMISH_MCTAVISH wrote: »

And therein lies the problem.

90%+ of those that rent can clearly afford to pay a mortgage.

But instead are forced to pay for someone else's mortgage, rather than their own.

Because the CBA to raise a deposit and their credit rating is poor perhaps.

OffGridLiving

Graham_Devon wrote: »

A recovery (IMO) would be when we can start removing stimulus and still grow.

By 'removing stimulus', do you mean just stopping QE or do you mean unwinding it?

I can't imagine that they would start unwinding it until the economy is at the start of a boom, in which case it'd be as good a method to slow down an overheating economy as raising interest rates.

If they unwind it too soon, then they'll just kill off a recovery and we'll be back into recession. There is a huge difference between turning off the bath taps and pulling out the bath plug.

grizzly1911

OffGridLiving wrote: »

By 'removing stimulus', do you mean just stopping QE or do you mean unwinding it?

I can't imagine that they would start unwinding it until the economy is at the start of a boom, in which case it'd be as good a method to slow down an overheating economy as raising interest rates.

If they unwind it too soon, then they'll just kill off a recovery and we'll be back into recession. There is a huge difference between turning off the bath taps and pulling out the bath plug.

Have they finished filling it yet?

Remains to be seen whether they will ever drain the bath.

Graham_Devon

OffGridLiving wrote: »

By 'removing stimulus', do you mean just stopping QE or do you mean unwinding it?

I can't imagine that they would start unwinding it until the economy is at the start of a boom, in which case it'd be as good a method to slow down an overheating economy as raising interest rates.

If they unwind it too soon, then they'll just kill off a recovery and we'll be back into recession. There is a huge difference between turning off the bath taps and pulling out the bath plug.

I mean more than just QE.

We also have, but often forgotten at times of joy over HPI:

- Funding for lending
- Lend a hand
- Increasing housing benefit bill (which itself increased 35% since 2009)
- SMI
- Low rates

In 2014, we are supposed to have full mortgage guarantee's for all.

QE is just one piece of stimulus. To have QE running alongside Funding for Lending is extraordinary in this first place. But to have mortgage guarantee's on the top of QE and funding for lending?....well, it can hardly be classed as normal, and therefore, neither can the growth achieved on the back of all these things.

To have normal growth, the majorty of those above need to be removed without the system falling down. I don't think we are at a point where we could do that yet. Neither does anyone else.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I don't think we are at a point where we could do that yet. Neither does anyone else.

Well obviously not.

But once global credit markets returns to normal, the support currently required to restore functionality to a still-dysfunctional mortgage market will no longer be required.

And it then can and should be removed.

This is probably still many years away however, and until then, the government is doing it's job to ensure the stable functioning of markets vital to the economy.

As it should.